At the annual conference of the European Systemic Risk Board, Christine Lagarde expressed concerns about stablecoin issuers outside the European Union.
Lagarde's Position
Christine Lagarde, President of the European Central Bank, stated that stablecoin issuers outside the EU should be held to the same strict standards as those within the bloc. She warned that looser regulations elsewhere could create risks, including potential financial instability.
Risks of Looser Rules
Lagarde noted that MiCA’s strict rules apply only to EU-based stablecoin issuers, allowing companies outside the region to operate under looser regulations. In a crisis, investors might rush to cash in their EU stablecoins, which are shielded from fees, but the EU's reserves might not suffice for everyone.
International Coordination and MiCA
Lagarde emphasized that the EU should block such arrangements unless non-EU countries implement equivalent rules and safeguards for cross-border asset transfers. She highlighted that international coordination is crucial as weaker regulations elsewhere could pose significant financial risks.
Christine Lagarde's statements highlight the need for stringent regulations for stablecoins on a global scale to prevent potential financial threats.
